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What You Need to Know about the Increase in OSHA Fines

The Occupational Safety and Health Administration (OSHA) recently increased its maximum penalty for workplace safety violations. The move could impact how many companies, especially small business owners, run their operations.

Here’s what you need to know about the penalty increases and how you can protect your business.

What are the new penalties?

OSHA fines increased 78 percent on Aug. 2. The maximum penalty for serious and failure-to-abate violations increased from $7,000 per violation to $12,471 per violation. The fines for the most serious infractions — willful and repeated violations — increased from $70,000 to $124,709.

Even infractions that occurred in 2015 could be subject to the new penalties. OSHA can issue citations under the new penalty for any incidents that occurred after Nov. 2 of last year. States that oversee their own Occupational Safety and Health Plans also are required to enact maximum penalties that mirror the new OSHA penalties.

The changes also may apply to lower fines that OSHA issues. Experts say they expect all OSHA fines across the board to increase by 78 percent.

Why are fines increasing?

OSHA hasn’t increased its maximum fines in 26 years. The changes account for inflation over that time period, which is why the increases seem so high. The penalty increases come after Congress enacted a law last November that required federal agencies to make sure their penalties aligned with inflation.

Why many business owners are worried

The 78 percent increase is pretty steep, especially for small business owners. Attorneys who represent employers say their clients were worried OSHA would wait until after Aug. 2 to issue citations so it can take advantage of the higher penalties. OSHA likely will do this only in cases where the infractions are so grave and repeated that they endanger workplace safety. Basically, rather than giving a bad employer a slap on the wrist, they’ll come down with the hammer to make a point and discourage the behavior in the future.

What you can do

With the new increases in fines, it’s more important than ever for business owners to take a proactive stance on risk mitigation. This means reviewing current safety plans, retraining your employees on safety measures and educating yourself on the latest innovations on safety in the workplace. There are some consultants that focus on developing risk mitigation plans for different industries. Enlisting the help of these professionals could have a positive impact on the insurance premiums that you pay.

Let’s face it, insurance companies don’t want to pay out claims (although they generously do every day). If a business owner can show an underwriter that he or she has a proactive plan in place to mitigate the risk, the underwriter is more apt to reduce the premium because the risk is reduced. Underwriters often will ask for copies of safety plans and even may do a site visit to inspect the risk, so it’s important to have a plan. While OSHA and insurance are separate, these new OSHA fines could spark a new level of safety awareness in the marketplace and have a positive effect on your bottom line.

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